Guest Column: Experience Is the Retail Edge 

Press enter to search
Close search
Open Menu

Guest Column: Experience Is the Retail Edge 

By Peter Sheldon - 01/24/2020
bytes and line graph

Retail industry analysts will look back at 2020 as a pivotal year for consumers and brands alike, as major shifts in technology and shopping behavior converge. 

Significant improvements to the mobile shopping experience mean that the predicted “retail apocalypse” will actually look more like a steady erosion of physical retail, as purchases of almost every category of goods get easier online. Expect to see more brands delight customers with “experience centers” that create community and give shoppers the chance to interact with “high consideration” products, which typically involve significant research before you buy. 

And as consumers increasingly expect transparency from brands and retailers, we’ll see sustainability as an opportunity to build brand loyalty, rather than a fad. 

Evolution of 5G networks pushes the boundaries of subscription retail 

As recently as five years ago, only a few items like your laptop and your phone, were connected to WiFi. Then your TV became an Internet-connected device. Today, a cluster of 30 or 40 things in your house are permanently connected to your network, including appliances, smart speakers, and temperature sensors. 

WiFi is quickly becoming obsolete, and everything will connect over 5G, leading to a possibility of dozens or hundreds of connected devices not just inside your home but connected wherever you take and use them. With more products becoming connected, expect the upfront price to plunge on high consideration products such as and electronic devices, as manufacturers increasingly charge subscriptions to access value-added services that are built into the device. 

Your “purchase” will effectively become a “security deposit,” as the hardware manufacturer leases the value of the product to you through the monthly fee. Expect smaller, cheaper 5G chips to be embedded in all sorts of products, including clothes, creating a new subscription commerce opportunities and experiences. 

Brand retail “experience centers” create a tale of two cities

General merchandise purchases—groceries, food and beverage--will move online, starving brick and mortar retails of shoppers. This doesn’t mean retail is dead. Expect to see successful e-commerce brands invest their online profits into physical retail “experience centers.” 

While Amazon recently announced it is dramatically expanding the footprint of its Amazon Go stores, the vast majority of its shoppers don’t have the opportunity to try items before they make a purchase online.

Experience centers are increasingly popping up around “high-consideration” products where potential buyers can feel a sense of community, talk to other owners, and interact with product experts, all without feeling sales pressure. Often there is no way to buy onsite. It’s almost like joining a cult.

Popup experiences are possible in unconventional locations, such as high-visibility parking lots, inside shopping malls, or in other privately-owned public spaces. Savvy brands are creating experience centers in customized shipping containers that can be quickly loaded onto a truck and placed where they create an instant attraction. As the experience center trend blossoms, expect brick and mortar retail to respond with creativity and urgency.

Sustainable brands command premium rates 

Sustainability is a huge opportunity, and not a fad. According to Forrester, 54% of US online adults believe companies should improve local communities; 51% like to buy products that are environmentally friendly; and 46% like to buy products that are made locally.

Consumers expect radical levels of transparency from brands, and everything is on the table, including what employees are paid, the breakdown of male vs. female employment and the environmental and social impact of the supply chain. Video tours of the factory floor, interviews with farmers and producers supplying product inputs, and other behind the scenes views of the company are becoming standard and part of the brand’s overall value proposition. 

Brands are responding and investing heavily in content that tells their sustainability and social responsibility stories. Those brands who connect with the consumer’s values alignment can command a significant premium over similar products in the category that are less sustainable, or those that have not made their story public.  

Peter Sheldon is senior director of strategy, Adobe

More Blog Posts In This Series

shopper with bags

Commentary: Retailers will need to work a lot harder to generate growth in 2020

The year 2020 has started with modest growth in pure retail, where sales rose by 2.7%.

Commentary: The Rippling Effect of Coronavirus Across Retail

To better understand the challenges posed by the coronavirus let’s take a closer look at the rippling effect caused by this health crisis and see how it’s disrupting today’s global economy.

nrf show visitors

Commentary: Three Standout Trends from NRF 2020

The NRF 2020 Vision: Retail’s Big Show saw a record-breaking 40,000 attendees last month, including 16,000 retailers, 800 exhibitors and 200 sessions.